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The End Game

Although the attached is a presentation on the current status of our wounded economy — limping onto the field one last time, hoping against hope that the steroids will last another 15 minutes, it also describes the turn your relationship with friends and family will take when sharing with them your scary new world view after reading this presentation.

Best read it when you’re not going to be around civilians for a while. From hedge fund manager Raoul Pal of Global Macro Investors: The End Game.

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The End Game — 5 Comments

Heard all this ‘end of civilization’ stuff before. Agreed it’s not looking brilliant on many levels but this kind of man-made calamity is rare and whenever a vacuum happens, it eventually gets filled by new entrepeneurs in a deconstruct/reconstruct process. This process could be quite painful for a while but the nature of society is to come together and move forward during and after the blood-letting begins. So hang-in. I have been holding cash reserves for a year or two now but I don’t believe any financial ‘armageddon’ will be permanent (months, 1 year, 2 years?).

It is politically too disastrous and politicians love their elected positions more than life itself. The United States has a huge productive infrastructure that will not just cease totally. At the very least there will be local business that start up producing food, consumables etc. and eventually even new banks will rise up. This represents the extreme,

Robert Prechter and others get huge attention (and ego strokes) doing this type of ‘panic-mongering’ for a living. Do not trust them either. Their judgement is suspect because their egos get too large. Do not under-estimate the resilience of our society but by all means take steps to protect your dollars and look into holding real cash. Also remember that whenever ‘armageddon’ sentiment rears it’s head in the popular media, that may signal that a bottoming process is beginning.

I agree it might not be TEOTWAWKI in 6 months, but for different reasons. I think TPTB will do everything in their power — at first, reasonable, but later throwing reason out with the Southern Europeans — to keep the ponzi afloat. While the dollar will initially devalue some more with QE, what alternative is there in the end?

Having said all that, I believe the costs will be enormous. One way or the other, there must be a reconciliation between asset values and debt — which are currently out of balance in many crucial areas. During the Depression, it happened the way it always has — with failures, write downs, and eventually resurrection. When that process isn’t allowed to occur, it only means the fall will be faster and harder — destroying many financial institutions (that have been pretending their loans are adequately secured) and savers/investors alike.

He says six months till the beginning of the end. I’d do everything I could to make as much money in whatever markets I could during those next six months. Then, regardless of whether he’s right or not, you’re net ahead.

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